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DISCONTINUED OPERATIONS
 12 Months Ended
Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS

NOTE 22 – DISCONTINUED OPERATIONS

 

On November 22, 2022, the Company entered into two Asset Purchase Agreements and one Simple Agreement for Future Equity (“SAFE”) with the Company’s CEO, Saagar Govil, to secure the sale of the subsidiaries Cemtrex Advanced Technologies, Inc, which include the brand SmartDesk, and Cemtrex XR, Inc., which include the brands Cemtrex XR, Virtual Driver Interactive, Bravo Strong, and good tech (formerly Cemtrex Labs), to Mr. Govil

 

Due to the on-going losses and risk associated with the SmartDesk business the Company has valued the royalty and SAFE agreement associated with the SmartDesk sale at $0 and considers such consideration to be a gain contingency.

 

 

Based on sales projections for Cemtrex XR, Inc., the Company does not believe that it will exceed the sales levels required to exceed the $820,000 royalties due and has not accounted for any additional royalties at this time. In accordance with ASC 310 – Receivables, the Company has discounted the royalties due and during the nine-month ended September 30, 2023, has recognized $704,893 of royalties due and will amortize the remaining amount over the period the royalties are due.

 

The following table summarizes the loss on the sale recorded during fiscal year 2023, included in Income/(loss) from discontinued operations, net of tax in the accompanying condensed consolidated statement of Operations:

   

      
Purchase Price  $745,621 
Less cash and cash equivalents transferred   (699,423)
Less liabilities assumed   (10,924)
Net purchase price  $35,274 
      
Assets Sold     
Accounts receivable, net  $625,638 
Inventory, net   980,730 
Prepaid expenses and other assets   502,577 
Property and equipment, net   837,808 
Goodwill   598,392 
Total assets sold   3,545,145 
Liabilities Transferred     
Accounts payable   370,774 
Short-term liabilities   364,775 
Long-term liabilities   318,981 
Total liabilities transferred   1,054,530 
Net assets sold  $2,490,615 
      
Pretax loss on sale of Cemtrex Advanced Technologies, Inc, and Cemtrex XR, Inc.Companies  $(2,455,341)

 

Assets and liabilities included within discontinued operations on the Company’s Condensed Consolidated Balance Sheets at September 30, 2023, and September 30, 2022, are as follows;

  

   September 30,   September 30, 
   2023   2022 
Assets                        
Current assets          
Cash and equivalents  $-   $714,420 
Trade receivables, net   -    561,470 
Inventory –net of allowance for inventory obsolescence   -    1,043,865 
Prepaid expenses and other assets   -    153,461 
Total current assets   -    2,473,216 
           
Property and equipment, net   -    825,850 
Other   -    672,627 
Total Assets  $-   $3,971,693 
           
Liabilities          
Current liabilities          
Accounts payable  $-   $205,622 
Short-term liabilities   -    464,429 
Deposits from customers   -    125,032 
Accrued expenses   -    10,136 
Total current liabilities   -    805,219 
           
Long-term liabilities          
Deferred revenue        6,273 
Total long-term liabilities   -    6,273 
Total liabilities  $-   $811,492 

 

During the first quarter of fiscal 2023, Vicon completed the closure of its discontinued operating entity Vicon Systems, Ltd. located in Israel. The Company received funds related to benefit obligations of $96,095, which at the time of operational closure were not guaranteed to be retrievable. The company paid $7,010 in consulting fees for assistance in retrieving these funds. The net amount of $89,085 is recognized on the Company’s Condensed Consolidated Income Statement as part of the Loss on Discontinued Operations.

 

 

Gain/(loss) from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of Cemtrex Advanced Technologies, Inc. and Cemtrex XR, Inc., sold during the first quarter of fiscal year 2023, which are presented in total as discontinued operations, net of tax in the Company’s Condensed Consolidated Statements of Operations for the years ended September 30, 2023 and 2022, are as follows:

 

           
   Year ended September 30, 
   2023   2022 
         
Total net sales  $649,061   $5,248,143 
Cost of sales   57,429    2,758,553 
Operating, selling, general and administrative expenses   1,104,506    5,228,836 
Other (income)/expenses   3,195    65,539 
Income (loss) from discontinued operations   (516,069)   (2,673,707)
Amortization of discounted royalties   44,272    - 
Loss on sale of discontinued operations   (2,455,341)   - 
Adjustment of benefit obligation   89,085    - 
Income tax provision   -    800 
Discontinued operations, net of tax  $(2,838,053)  $(2,674,507)